Given the input coefficient matrix for a hypothetical economy made up of only two industries as A [0.1 0.5] [0.3 0.2] provide an economic interpretation for each of the elements in matrix A
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Given the input coefficient matrix for a hypothetical economy made up of only two industries as A [0.1 0.5] [0.3 0.2] provide an economic interpretation for each of the elements in matrix A
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- Q.No.3. (a) What is the input use level for total value product maximization for the following function? y = x1 + 0.1x12 - 0.05x13 + x2 + 0.1x22 - 0.05x23 Q.No.3. (b) Briefly make a comparison between output maximization criteria and profit maximization criteria with respect to necessary and sufficient conditions?List the capital inputs necessary to produce each of the following. cars high-school education plane travel fruits and vegetablesPLEASE Show ALL Workings VERY CLEARLY! By deriving the returns to scale characteristics of the two production functions, systematically Verify whether the both functions are homogeneous and/homothetic, and calculate the capital to labour ratios for the 2 plants that minimizes the firm's costs at any chosen output level of the 2 goods.
- The Cobb-Douglas production function can be shown to be a special case of a larger class of linear homogeneous production functions having the following mathematical form: Q=γ[δK−ρ+(1 - δ)L−ρ]−ν/ρ�=�[δK−ρ+(1 - δ)�−ρ]−ν/ρ where γ is an efficiency parameter that shows the output resulting from given quantities of inputs; δ is a distribution parameter (0 ≤ δ ≤ 1) that indicates the division of factor income between capital and labor; ρ is a substitution parameter that is a measure of substitutability of capital for labor (or vice versa) in the production process; and ν is a scale parameter (ν > 0) that indicates the type of returns to scale (increasing, constant, or decreasing). Complete the following derivation to show that when ν = 1, this function exhibits constant returns to scale. First of all, if ν = 1: Q� = = γ[δK−ρ+(1 - δ)L−ρ]−1/ρ�[δK−ρ+(1 - δ)�−ρ]−1/ρ = = γ[δK−ρ(−1/ρ)+(1 - δ)L−ρ(−1/ρ)]�[δK−ρ(−1/ρ)+(1 - δ)�−ρ(−1/ρ)] = = Then, increase the…With a production function of Q = L + 2K if r = $4 and w = $4, how many units of capital and labor will be optimally utilized? All K and no L. All L and no K. Equal amounts of K and L. A combination of K and L not represented above.Cobb-Douglas Production Function 1. Estimate the Cobb-Douglas production function Q ¼ αLβ1Kβ2, where Q = output; L = labour input; K = capital input; and α, β1, and β2 are the parameters to be estimated. 2. For the Cobb-Douglas production function, test whether the coefficients of capital and labour are statistically significant. For Cobb-Douglas production function, determine the percentage of the variation in output that is explained by the regression equation. 3. For Cobb-Douglas production function, determine the labour and capital estimated parameters and give an economic interpretation of each value. 4. Determine whether this production function exhibits increasing, decreasing, or constant returns to scale. (Ignore the issue of statistical significance.
- question 2 Student tuition at Boehring University is $160 per semester credit hour. The state supplements school revenue by $90 per semester credit hour. Average class size for a typical 3-credit course is 60 students. Labor costs are $4,500 per class, materials costs are $22 per student per class, and overhead costs are $28,000 per class. The multifactor productivity ratio currently is 1.33 and the labor productivity ratio is $200.89 per hour if the instructors work on an average of 14 hours per week for 16weeks for each 3-credit class of 60 students. Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $33,000 per class section from the current $28,000 per class section. The…With a production function of if r = $4 and w = $4, how many units of capital and labor will be optimally utilized? All K and no L. All L and no K. Equal amounts of K and L. A combination of K and L not represented above.Confirm that the Cobb-Douglas production function satisfies all the three properties: more is better, concavity, and CRS.
- The change in the optimal capital-labor ration if both inputs are perfect complements inproduction and both their prices increase by an identical percentage. Assume the totalcost before and after the change in input prices remains the same.All of these statements about the production function are true EXCEPT a) the curve features 3 distinct regions: increasing returns to scale, constant returns to scale, and diminishing returns to scale. b)the curve's shape matches and its description of the interaction between the graph's axes represents the law of diminishing returns c) it can be applied to many economic markets d) one variation is used to show the difference between firm and market specific riskquestion 8 For each of the following situations, Find the Total Cost function, TC(q) Identify the optimal input mix, L* and K* for the given q. A) q = 2*MIN(L,5K); w = 8, r = 10; i) (5 points) TC(q) = __________________ ii) (4 points) q = 20 L* = _________________ K* = _________________
